BlackBerry Fully Valued, Even In A Breakup Sale: StreetInsider

By Teresa Rivas

Shares of BlackBerry (BBRY) are down 2.7% in morning trading, earlier today Bloomberg detailed how the company could be sold piecemeal.

Yet even if it were to be sold for parts, BlackBerry still looks fully valued at its current levels. StreetInsider.com has a rundown on its blog of analyst estimates that seem to value the company around $5 billion, just under its current market cap.

From the article: “Analysts think that BlackBerry’s patents and software carry a value of $1 billion, while the company also has about $2.8 billion in cash. Most purchasers would also shut down the company’s hardware business at a cost of around $800 million. Of course, fewer customers purchasing BlackBerry hardware over the next few months would mean value on that unit has a real risk of further decline. Value, even in a break-up case, is somewhere around $10.50 per share.”

The shares were recently around $10.25.

It’s also worth noting that its cash assets look likely to be diminished going forward, as the Street is expecting the company to report another loss this quarter.

The firm also questions the value of the company’s app ecosystem, a vital component that any purchaser of its software unit would consider.

From the article: BlackBerry has over 120,000 BlackBerry 10 (BB10) apps at last count, versus 170,000 apps in Microsoft (MSFT) Windows Phone Store. But, a startling 47,000+ apps have been made by one developer: S4BB. BerryReview noted that the first 20 to 30 apps by the developer are decent, while the rest are basically useless. Many are audiobooks or city guides, things many users might not deem as an actual app. Another developer — Mippin — has submitted over 17,000 BB10 apps. Spamming probably is evident in other app stores, though it’s not likely a similar amount by one or two developers would pass muster with Apple (AAPL) or even Microsoft.”

Add a Comment

We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name.

Comment

There are 6 comments

AUGUST 21, 2013 11:46 A.M.

A Pull wrote:

Zombie apps. Apple has more than 500,000 apps that have never been downloaded. Not even once. I'm sure the case is the same for Android. Maybe between all OS's you might find 2,000 really good apps.

AUGUST 21, 2013 11:52 A.M.

Bobby wrote:

The SEC should investigate this author. This article is so full of inaccuracies I would wonder if it is coordinated with a hedge fund who recently opened a short position. Very concerning.

AUGUST 21, 2013 12:51 P.M.

Anonymous wrote:

Blackberry entered the rubicon. There's no looking back. And business could not possibly be as usual. Like at this point. How do you possibly maintain the facade? Hmm. Seriously. More employees will be laid off because it's now officially screw the pooch time.

AUGUST 21, 2013 1:03 P.M.

Anonymous wrote:

couldn't agree more with bobby. everyone quoted in that Bloomberg article has previously issued analysis clearly showing they're in it to short the stock.

AUGUST 21, 2013 4:17 P.M.

Can Canada's Economy Secretly Be In Recession? Or Just Headed That Way. wrote:

Me thinks. Canada's Parliament was prorogued because the government is avoiding letting the economic data from last April to October 2013 to hit the fan. Hmm. It's bad.

And Blackberry is currently overpriced. Not enough deflation priced in.

Re Fairfax's Prem Watsa. I doubt they're going to make the committement to Blackberry long term. Ha. He split for one reason. To protect his reputation. The last thing Watsa wants is his business image to smell like an open grave.

AUGUST 21, 2013 7:55 P.M.

Anonymous wrote:

@pull,

The issue isn't poor quality apps, it's that BlackBerry knowingly allowed two developers to to develop nearly 60,000 apps in order to make their app store "look good". Additionally, the likelihood is that BlackBerry knew most of these 60,000 apps were of very low quality, or not really apps at all but audio books and such.

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.